Will and Estate Definitions

 Posted by on November 7, 2016
Nov 072016

Administration: Court proceeding to appoint a fiduciary, known as an administrator, when the deceased individual did not leave a last will and testament and left assets that were not otherwise provided for.

Bequeath: an interest in an estate passed by Will (as opposed to an intestate share).

Intestacy: when a decedent does not have a will. The laws of the State where s/he resided at death will govern the distribution of all assets that do not pass by operation of law (e.g. joint property) or by trust provisions.

Credit Shelter Trust: trust created under a will or trust that holds assets in trust for the benefit of the surviving spouse in order to utilize the deceased spouse’s credit against federal gift taxes and do not become assets of the surviving spouse’s estate. Upon death of surviving spouse, assets in the trust pass to others, e.g. children.

Decedent: person who is deceased.

Devise: an interest in real property passed by Will (as opposed to an intestate share)

Disclaimer: a formal written refusal by a person to accept an interest in property from an estate. Once disclaimed, the interest is treated as if there had never been a transfer to the person who made the disclaimer.

Estates, Powers and Trusts Law (EPTL): New York law governing Wills and Trusts

Executor: person who administers the estate of a decedent who left a Will.

Fiduciary: personal representative. Includes executors, administrators and trustees.

Legatee: a person who receives an interest in an estate by will.

Marital Deduction: the deduction from the value of the gross estate in an amount equal to the value of property that passes from the decedent to the surviving spouse. See also “QTIP” below.

Probate: administration of an estate where decedent left a Will which is filed in the Surrogate’s Court.

Probate Assets: assets that would have passed under a Will, which is basically all assets other than life insurance, assets that are jointly held with rights of survivorship, or assets that have a named a beneficiary.

QTIP: Qualified Terminable Interest Property: a transfer to a surviving spouse that qualifies for the marital deduction, but only gives the survivor the right to all income for life.

Right of Election: the minimum amount the surviving spouse is entitled to from the estate of the deceased spouse.

Testamentary Trust: a trust created in a Will or trust that becomes effective upon the death of an individual.

Nov 072016

Definition: A fiduciary relationship where one party, known as the “Grantor” (or “Creator” or “Settlor”), gives another party, known as the “Trustee” property to be held for the benefit of the Grantor or a third party, known as the “Beneficiary”.

Living Trust: a trust that is created during the Grantor’s lifetime.

Testamentary Trust: a trust that is created on the death of the Grantor.

Irrevocable Trust: a trust that cannot be revoked by the Grantor. There is, however, the possibility of changing the beneficiaries or of changing trustees.

Revocable Trust: a trust that can be revoked.

Benefits of Trust:

  1. May avoid probate: The trust can be immediately administered without the need for court intervention. Probate is only needed if there is a will that “pours over” assets to the trust.
  2. Private document: No need to make the terms of the trust known to beneficiaries and it is not a public document.
  3. No need to find missing or excluded heirs: unlike a will probate proceeding, there is no need to notify missing or excluded heirs of the administration of a trust.
  4. Less chance that the terms of the trust will be contested: because the trust does not have to be made public, and there is no need to notify missing or excluded heirs, there is less chance that the trust will be contested.
  5. Immediate continuity of asset management: because the trust does not have to go through probate, trust assets can continue to be administered pursuant to the terms of the trust with little or no interruption.
  6. May reduce estate expenses: because the trust does not have to be probated, it may reduce estate expenses.




Can be effective when signed Effective at death
Can be used for estate planning Only used for estate planning
Can plan for incapacity of the Grantor Cannot do so
Can be used for Medicaid planning for the Grantor Cannot do so
Private document Public document


Types of Trusts Include:
Medicaid Asset Management Trusts: protects the Grantor’s assets from Medicaid
Spendthrift Trusts: protects the beneficiary’s assets from the reach of creditors
Supplemental Needs Trusts: protects the assets of or for a disabled beneficiary
Education Trusts: holds money for education
Pet Trusts: provides for the care and maintenance of the Grantor’s pet(s)

Supplemental Needs Trusts

 Posted by on November 7, 2016
Nov 072016

Supplemental or Special Needs Trusts (“SNTs) are frequently used to receive an inheritance or the proceeds of a personal injury litigation on behalf of an individual with a disability, in order to allow the person to qualify for Medicaid and other government benefits. The assets and income of the SNT will not be counted as available for consideration of a government program e.g. Medicaid. SNTs are intended to supplement, and not replace, government benefits.

SNTs can be

  • First party: created with the assets of the disabled beneficiary. This includes a litigation settlement or an inheritance where there was no provision made for the disabled beneficiary. The State providing Medicaid benefits will have a right to be reimbursed upon the beneficiary’s death for Medicaid benefits paid on behalf of the beneficiary. The beneficiary must be under age 65 at the time the trust is created, and the SNT must be created by a parent, grandparent legal guardian or court
  • Third party: created with the assets of a person other than the beneficiary, the beneficiary’s spouse, or someone with a legal obligation of support of the beneficiary. This includes an inheritance where the benefactor specifically created an SNT in a will or trust for the disabled beneficiary. The trust must give the trustee unfettered discretion, then the government benefit program will not count the income or principal unless the trustee makes it available to the beneficiary.

Medicare Definitions

 Posted by on November 7, 2016
Nov 072016

Medicare is the primary insurance of most senior citizens in the United States. There are no financial requirements or limitations associated with Medicare. Medicare is broken down into Par ts A, B, C and D.

Medicare Part A: Primarily covers inpatient hospital services. However, in limited circumstances it also covers certain skilled home health services, some hospice care, and certain skilled care and rehabilitative care in a skilled nursing facility subject to a deductible.

Medicare Part B: Primarily covers physician services and related testing and medical equipment.

Medicare Part C: Medicare Advantage Programs, including, HMOs and other coordinated care plans, serves as an alternative to traditional Part A and Part B plans.

Medicare Part D: Prescription drug coverage.

Medigap Insurance: private insurance policies that cover the portion of medical bills including deductibles not covered by Medicare.

Medicaid Definitions

 Posted by on November 7, 2016
Nov 072016

Community Spouse Resource Allowance: the amount of assets the spouse of a nursing home applicant may maintain without having to do a spousal refusal. May also be used in certain instances in homecare applications.

Excess Resources/Excess income: countable assets/income above the permissible Medicaid level.

Lookback period: The period of time Medicaid will “lookback” from the date the applicant wants Medicaid to begin paying. The lookback period is different for nursing home care than for homecare. For nursing home care, the lookback period is 5 years from when the individual is in the nursing home and otherwise eligible for Medicaid, meaning the individual’s assets are at or below the Medicaid limit. For homecare, there is no lookback, however, some Medicaid caseworkers will request 3 months of financial records.

Managed Long Term Care Plan (“MLTC”): The entity that actually determines the amount of care an individual applying for Medicaid will receive. The home care agencies contract with the MLTC and provide the approved number of hours.

Minimum Maintenance Needs Allowance (“MMNA”): amount of income the spouse of a nursing home applicant may maintain absent extenuating circumstances increasing the amount.

Net Available Monthly Income (“NAMI”): the amount of income the Medicaid recipient is deemed to have available to offset the cost of care.

Personal Needs Account: An account set up for a nursing home resident with the facility.

Personal Needs Allowance (“PNA”): The amount of income a Medicaid applicant is allowed to maintain and still be eligible for Medicaid. Currently, a nursing home resident is allowed to maintain $50 of income.

Pooled Income Trust: A trust administered by a not for profit which hold either the assets or income of a disabled individual. Pooled trusts are frequently used to shelter the “excess income” or “spenddown”, which is the income of the applicant above the Medicaid limit, which would otherwise have to be used to pay for the individual’s care. By using a pooled trust for income, the money can be used for the disabled individual’s expenses.

Promissory Notes: Promissory notes are used as part of a Medicaid planning technique when a gift of assets is made. It allows for a portion of an applicant’s assets to be considered a gift, which will cause a penalty period. The promissory note creates a loan of assets that will cover the resulting penalty period.

Spousal refusal: a letter by which the nonapplying spouse refuses to make his/her income or assets available to pay for the cost of care of the Medicaid applicant spouse.

Guardianship Definitions

 Posted by on November 7, 2016
Nov 072016


AIP (Alleged Incapacitated Person): refers to the person in an Article 81 proceeding for whom a guardian is sought. The Court must determine that the person is unable to provide in some manner for himself/herself (i.e. incapacitated) for a guardian to be appointed. The person is referred to as the “alleged incapacitated person” until the court so determines, and is called the “incapacitated person” or “IP” after. If the person consents to the appointment of a guardian, the person may be referred to as a “person in need of a guardian” rather than as an incapacitated person.

Article 17A Proceeding: refers to Article 17A of the Surrogates Court Procedure Act Article 17A. Proceeding to appoint a guardian for a developmentally disabled individual, or a mentally retarded individual, or someone suffering from similar conditions who is certified as such prior to his/her 22nd birthday.

Article 81 Proceeding: refers to Article 81 of the Mental Hygiene Law (“MHL”). An Article 81 Proceeding is held to first determine whether a person is incapacitated by clear and convincing evidence, the highest standard of proof. It must be shown that the “Alleged Incapacitated Person, or “AIP” is unable to manage his or her personal needs or financial affairs and that he/she is unable to appreciate the resulting danger this inability causes for a guardian to be appointed. If so, that person will be deemed an “Incapacitated Person” (or “IP”). A guardian will then be appointed for the IP consistent with that IP’s needs and best interests, e.g. to assist with property management needs, such as maintaining bank accounts and paying bills, or personal needs, such as ensuring the IP is safe and provided for, or for both property management and personal needs.

Court Evaluator: person who acts as the “eyes and ears” of the court in an Article81 proceeding prior to appointment of a guardian. The court evaluator may be the only objective person in the guardianship proceeding to meet with the AIP. He or she then prepares a report for the court and recommends whether or not a guardian should be appointed.

Court Examiner: reviews the guardian’s reports on behalf of the Court in an Article 81 proceeding after the guardian is appointed.

Designation of Standby Guardian: appointment of an individual to act as guardian in the event that the nominated guardian is unable to act. Appointment is made by a nominating form, and requires the standby guardian to seek confirmation from the Surrogate’s Court within 60 days of appointment.

Guardian: The guardian is appointed to provide for the personal needs and or the property management needs of a person who is found to be incapacitated consistent with the Order appointing the guardian.

Guardian ad litem: court appointed guardian to represent the interests of a minor or incompetent in a court proceeding.

Advanced Planning Documents

 Posted by on November 7, 2016
Nov 072016

The documents outlined below are the more common advance planning documents. They appoint another to act in the place of the maker, and more importantly, state the maker’s intentions in the event the maker becomes incapacitated and unable to state intent or to act. These documents can avoid litigation to appoint a guardian, to determine one’s desires regarding end of life decisions, or the disposition of one’s assets.

Agent for Disposition on Remains: a document that states one’s wishes for funeral and disposition and appoints an agent to ensure that those wishes are carried out.

Do Not Resuscitate Order: a written order that directs healthcare providers not to attempt cardiopulmonary resuscitation (“CPR”) in the event the patient suffers cardiac or respiratory arrest. The order is made by an individual with capacity and becomes effective upon his or her subsequent incapacity, as determined by the patient’s physician and confirmed by a second physician.

Durable Power of Attorney: a document that appoints another person to act immediately for all matters so designated other than healthcare. Such matters can include banking, managing, selling or purchasing real property, and engaging in long term care planning. Person executing the power of attorney must have sufficient capacity to appreciate the extent of the authority they are giving.

Principal: person appointing another to act for him/her

Attorney in Fact (can also be referred to as the Agent): the person who receives the appointment

Health Care Proxy: document that appoints another to make health care decisions for the individual in the event the individual is unable to make his/her own decisions.

Living Will: A formal written statement of a person’s wishes regarding medical treatment in the event the individual is not expected to regain a quality of life.

Family Health Care Decisions Act: Law that allows certain individuals to make health care decisions. Applies only in limited circumstances. Best to have a Health Care Proxy appointed.

Life Estate: commonly used to protect real property, but can be present in trusts and wills. A life estate transfers the property to someone else, reserving to the transferor ownership for the transferor’s life. The person(s) to whom the property is transferred has a “remainder interest”, which becomes effective only on the death of the transferor. However, the transferee’s consent will be needed to mortgage or sell the property. The life estate makes the transferor responsible for the upkeep of the property and payment of real property taxes. This allows the transferor to keep his/her real property tax exemptions (although a new application will be required). Upon the death of the transferor, the property will pass to the transferee by the terms of the life estate language.

Preneed Funeral Account: This account is established with a funeral home. Most are portable, so if you move, the account can be moved as well. These accounts allow for prepayment of many items associated with a burial, from the casket or cremation to the funeral, to the limos, the flowers, the burial plot, grave opening etc. The benefit of these accounts is they remain revocable and usually interest bearing until an individual applies for Medicaid at which point they have to become irrevocable. When irrevocable, they are not countable resources for Medicaid purposes, and no transfer penalty is imposed when they are created.

Last Will and Testament: a Will dictates how one’s property is to be disposed of after death. A Will also states who you want to administer that property. A properly drafted Will can also provide significant tax savings, make provisions for an ill spouse or a disabled or minor beneficiary, and appoint a guardian for dependent minor children. In the absence of a Will or other testamentary dispositions, the laws of the State of New York will determine who inherits your property.

Pourover Will: used in conjunction with a trust, it provides for all assets not already in the trust to be transferred to and disposed of by the trust.

Trust: a flexible document that can be tailored to meet the individual needs of its Creator. For example, a Trust can contain clauses that provide for control of the Creator’s assets, protect assets from being counted for Medicaid purposes or supplement the government benefits of a disabled beneficiary, among other purposes. See Trust definitions below for more information.

Jan 082016


Medicaid is a federal healthcare program administered by each state. Medicaid was intended to serve as the “payor of last resort.” Eligibility is based on financial need, and as such there are stringent asset and income requirements that must be met which are based on the size of the applicant’s household.

A type of investment where an individual makes a lump sum contribution (the “annuitant”) and in turn receives fixed periodic payments either for life or for a term of years. To the extent the anticipated return corresponds to the money invested, and the annuity names the state as the remainder beneficiary after the surviving spouse or minor child, no transfer penalty will occur.

Commercial Annuity: 
An annuity purchased through an insurance company

Private Annuity: 
An agreement between individuals such as family members where one acts as the insurance company would in the commercial annuity. The benefit of a private annuity is that it can be arranged with the consideration being assets other than cash, such as a home or other real estate.

Caregiver Agreements: 
Agreement whereby one family member provides services to another in exchange for compensation. Such agreements are subject to income taxation and other issues that need to be addressed.

Community Spouse: 
The spouse of a Medicaid recipient (who usually resides in his/her home)

Community Spouse Resource Allowance (“CSRA”): 
The amount of assets the non-institutionalized spouse is allowed to retain. It is currently equal to the greater of one half of the couple’s assets or $104,400 (in 2008).

Deficit Reduction Act of 2005 (“DRA”): 
Made major changes to the commencement of transfer of assets and penalty periods. Also added additional requirements to annuities.

February 8, 2006: date on which the DRA became effective.
Excess Resources/income: assets/income above the permissible Medicaid level. We can discuss what assets/income are excluded from the calculation.

Lookback period: 
Period during which Medicaid will “look back” from the date of a Medicaid application to determine if there were any transfers by the applicant for less than fair market value.
prior to February 8, 2006: all nontrust transfers were subject to a thirty six month transfer and all transfers to trust were subject to a sixty (60) month lookback.
February 8, 2006 and later: all nontrust transfers remain subject to the 36 month transfer and all transfers to trust remain subject to a 60 month transfer. However, beginning with applications filed on or after February 8, 2009, the lookback period will be increased one month for all nontrust transfers.

Minimum Monthly Maintenance Needs Allowance (“MMNA”): 
Amount of income the well spouse may maintain absent extenuating circumstances increasing the amount.

Net Available Monthly Income (“NAMI”):
The amount of income the Medicaid recipient is deemed to have available to offset the cost of care.


Medicare is the primary insurance of most senior citizens in the United States. There are no financial requirements or limitations associated with Medicare. Medicare is broken down into Parts A, B, C and D.

Medicare Part A:
Primarily covers inpatient hospital services. However, in limited circumstances it also covers certain skilled home health services, some hospice care, and certain skilled care and rehabilitative care in a skilled nursing facility subject to a deductible.

Medicare Part B: 
Primarily covers physician services and related testing and medical equipment.

Medicare Part C: 
Medicare Advantage Programs, including, HMOs and other coordinated care plans, serves as an alternative to traditional Part A and Part B plans.

Medicare Part D: 
Prescription drug coverage comprised of multiple prescription drug plans. Each drug plan has a different “formulary” or list of preferred prescriptions……. Each plan is subject to monthly premiums, annual deductibles, co-payments and coverage gaps.

Medigap Insurance: 
Private insurance policies that cover the portion of medical bills including deductibles not covered by Medicare.

Jun 072010

I know what you’re thinking: you’re young and healthy and you take care of yourself. So between the kids’ schedules, your job, and all the other demands in your life, why should legal planning be a priority? The reason is because incapacity or illness can happen to anyone, regardless of age. And if something should happen to you, who will raise your children?

Need for Healthcare Proxy, Living Will and Durable Power of Attorney: All the reasons these documents are important for other individuals are just as important for you. Should you become unable to state your wishes for healthcare or property management, these documents will formally and clearly state what your wishes are. There is a seminal case in NY ( Matter of Shah ) where a father was in a car accident which rendered him completely incompetent, and because he had failed to prepare these documents, his wife had to resort to a court proceeding to allow her to make healthcare and property management decisions for him. The time and expense resulting from this failure to plan all could have been avoided at a fraction of the cost and time with the execution of these documents.

Need for Trusts and Last Will and Testament: a revocable living trust is an ideal way for an individual to manage property and provide for minor beneficiaries. Trusts, whether created during lifetime or through a Last Will and Testament allow a parent to provide for the needs of minor children without giving the child the absolute right to spend. This is accomplished by appointing a trustee to manage the child’s property during minority (or until any age the parent chooses) and limiting the right to use the funds for certain reasons (e.g. college, new car etc) and not others (e.g. keg party or gambling binge).

Need for Life Insurance Trusts: Irrevocable Life Insurance Trusts are one way to build wealth for an estate and may also replace assets used for estate taxes. This may be important to replace the income in the event of the demise of a wage earner

The Need for Estate Planning: It is therefore just as imperative, if not more so, for you to prepare a Last Will and Testament that clearly states who will raise your kids if you are deceased. If you are unmarried or your spouse predeceases you, or dies simultaneously with you, your children will inherit your estate outright. A Living Trust or alternatively a Last Will and Testament with a testamentary trust allows you to provide for your children without giving them full unfettered access to your assets.

Minor Children Travelling with Nonparents: Should your children be travelling with friends or other family members, you can also formally designate another to make healthcare decisions for your minor children during travel. The authority you give can be limited to the period of travel, or can remain in effect indefinitely.

Need to Appoint a Standby Guardian: You can also appoint another as guardian of your minor children if you should become incapacitated or terminally ill. The guardian does not receive authority to act unless you become mentally incapacitated or physically incapacitated to the point that you are unable to care for your children.

Appointment of Guardian for Persons Considered Mentally Retarded or Persons with other Developmental Disabilities: A parent’s right to make healthcare and other decisions basically ends when the child reaches the age of 18. However, there are instances where a child is not able to live on their own due to a debilitating condition, such as cerebral palsy, epilepsy, autism, other neurological impairments or traumatic head injuries. In this instance, the parent or other would be guardian can petition to be appointed permanent guardian of that child to the extent needed. This can be of only the “person” or the “property” of the individual or both.

Apr 152010

Approximately 25 percent of Americans are “sandwiched” between parenting their own children and caring for aging parents. These demands, in addition to meeting their own needs, not only push the limits of their time and money, but may also challenge their marriages, friendships and health.

If you are “sandwiched,” I recommend that you seriously and honestly evaluate the demands you face, devise a realistic plan to meet them, and most importantly, enlist the assistance you need.

An elder law attorney may be your best ally in reaching a balance of these competing demands. Start with the following:

Evaluate with Your Parents the Level of Care They Need and Legal and Financial Arrangements: What assistance do your parents need now and how will they be cared for if their need for care increases? Will they live with you or stay at home? Will they move to an assisted living facility or is nursing home care needed? A review of their assets and long term care insurance is absolutely in order.

You, Your Spouse and Your Parents Should Each Have Advanced Directives: These documents appoint another to act e.g. to make healthcare decisions in the event of incapacity (Healthcare Proxy), make financial and other decisions (Power of Attorney or Trust), and determine how one’s property will pass upon death. (Last Will and Testament or Trust). While the time and expense of preparing these documents is small compared to their benefit, the cost of not having them if they are needed can be very high. Advanced directives can also provide for the care of minor children, anyone else you may be caring for, for disabled individuals of any age, and even for pets.

You and your spouse must also plan for your own family’s needs: Including living expenses, healthcare, retirement and college.

Don’t neglect yourself: you can’t help anyone if you do not care for you. Take care of your health and make time to relax and enjoy yourself.